Were you recently laid off from work? If so, you may be in financial distress. Even those who collect unemployment benefits barely find themselves scraping by. If you are one of those individuals, you need to make significant cutbacks. What might those cutbacks entail?
Sell your house. If you live in a home with an expensive mortgage that you cannot afford and if you do not anticipate finding a job in the next two or three months, get out now. Try to sell your home before your credit is severely impacted. Luckily, the housing market is starting to slowly improve in many areas of the country. Layoffs are increasing in frequency, but many Americans still have their jobs and can get a loan. List your home for sale based on its last appraised value or fair market value. Don’t sell yourself short, but middle class family homes, in the $75,000 to $150,000 range are easier to sell.
If you have been trying to sell your home and cannot, do you have extra room? If so, rent out a room. Do backgrounds check and check references. This can help offset the cost of a mortgage you cannot afford. In addition, right now many Americans have steady income, but poor credit. These Americans cannot get a home loan, even though they could likely afford one. For that reason, consider renting your home. This is ideal if your house is too big, but do not feel comfortable living with a stranger. Use the incoming rent to pay the mortgage. Use your spouse’s income or your unemployment check to pay rent on a much smaller and cheaper apartment.
Find a new apartment. If you are renter, as opposed to a homeowner, is your rent too expensive? Can you no longer afford it or will you barley be scraping by? If so, look for a new place to live. If you have children, you may want to keep them in their same schools. This is good, but live where you can afford. A city may have an average rent of $1,000. However, fifteen minutes away a smaller town may have an average rent of $500 a month. Due to the poor economy, many landlords are releasing tenants from their contracts with appropriate notice, such as 30 or 60 days.
Sell your car and buy a cheaper one. Your best avenue is to sell the car outright yourself. List it for sale in newspaper classified sections, Craigslist.org, and other places online. Consider the value of your car. Set a fair selling price, but make sure you have enough to payoff the rest of your automobile loan and buy a cheaper, used car. Driving around a used “old clunker,” may not be what you had in mind, but you can find quality used cars for $1,000 to $5,000. Right now, you need something that runs and gets you from point a to point b. As for just selling you car, this isn’t recommended. Even if there is public transportation in your area, remember the poor job market. When find a new job, it may be two or three town away.
Look at the cost of your landline and cell phone. Do you have both? Many see success with replacing their landline phones with cell phones. If you can’t, practice talking on your cell phone less and lower the minutes. If you can get out of your cell phone contract without large fees, do it. Get a prepaid phone and use it for emergencies only.
Lower the cost of your internet. Many times, internet access is considered an extra. Yes, it technically is. However, it is now a job search tool for you. If actively looking for a new job, you need internet access. Don’t cancel yours. Instead, look for cheaper lower speed packages or opt for dial up access instead.
Lower the cost of your television. If you have internet access, consider doing away with your television altogether. You can get your local news and weather online. If you want television, get the local channels only. You don’t need one hundred or more channels, many of which you never watch. Luckily, most shows are now streamed online for free. In addition, the season DVD will soon be released on Netflix. Speaking of Netflix, if you do away with television, consider a subscription. For less than $20 a month, you can get unlimited movies with three movies at a time!
The above mentioned lifestyle changes may sound significant and impossible to make, but remember your financial situation. You were laid off from work. It may be one month before you find a new job, but it may be one year or more. Don’t fall victim to debt, take charge now.